Facebook - The Latest To Target Mobile Carrier Voice Revenue

Investors were wildly excited ahead of Facebook’s (FB) January 15 announcement, which despite wide spread speculation over a number possibilities — a smart phone, video service and even a dating service of sorts — turned our to be for Graph Search. While many were arguably underwhelmed with the announcement, I still think that long-term it’s in the cards for Facebook to launch its own full blown search engine. After all, the promo for the event did read “come and see what we’re building” not what’s we’ve just built. For now the billion plus users will have to be content using Graph Search. That’s good for Google (GOOG) and Microsoft (MSFT) as well as those other search engine companies – IAC/Interactive (IACI) and AOL (AOL).

While investor eyes were keyed in on that event, two other pieces of news emerged that also have long term ramifications for Facebook and its shareholders. First, according to comScore (SCOR) newest Mobile Metrix report Facebook ousted Google Maps as the number one mobile app. Drilling down in the comScore data a bit deeper we find that Facebook and Instagram took the top two mobile app spots by time spent or engagement. Rounding out the top 7 were a slew of Google mobile apps – Gmail, You Tube, Google Maps, Google Play and Google Search. Combining those findings with something Facebook said on its 3Q 2012 earnings release — Facebook has over 600 million people sharing and connecting on Facebook every month using a mobile device — leads one to realize that Facebook is indeed a force to be reckoned with in the mobile. Quite a shift from how many — including myself – saw the company last summer.

But what makes this even more interesting was something Facebook did in a hushed hushed way. Last week when Facebook updated its Facebook Messenger app for the iPhone it included free voice calling in the U.S. A users can place a call to contacts from the conversation list if that person has Messenger for iOS meaning both parties need to be using the Messenger app.

The kicker is that the call goes over the mobile carrier data network or WiFi, instead of the carrier’s voice network. That means mobile carriers such as Verizon Wireless (VZ), AT&T (T), Sprint-Nextel (S) and others that offer the iPhone could experience mobile voice revenue pressure in the coming quarters. Despite all the advances in mobile data, voice is still a significant component of carrier revenues. Although wireless data revenues at AT&T grew 14.7% year over year in 4Q 2012 to $6.8 billion, wireless voice still accounted for the bulk of the company’s $14.9 billion in wireless service revenue for the quarter.

Now Facebook is not the first to roll such an offering out and this voice calling through Messenger is not the only way Facebook is challenging carrier voice revenue. Others include Google with its video chat service as well as Google Voice offering, Apple (AAPL) with FaceTime product and even Facebook’s integrated video calling offering via Microsoft’s Skype. All have the potential to put a crimp in carrier voice revenue. While Apple is not likely to allow other device manufacturers to offer FaceTime, Facebook probably does not have those same objections and before too long I’d expect to see Messenger enabled voice calling on other devices. Already Facebook’s Messenger app is available for Android, Research in Motion’s (RIMM) Blackberry OS as well as for Microsoft’s Windows Mobile.

How long until Facebook updates Messenger’s capabilities for those other OS platforms?

One potential date when we’ll here more on this comes next week when Facebook reports its 4Q 2012 results on Wednesday, January 30. As a frame of reference, current Wall Street expectations courtesy of Thomson One has Facebook earning $0.15 per share on revenues of $1.5 billion in revenue. That compares to the $0.12 per share the company generated on revenue of $1.26 billion in the September 2012 quarter.

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